Standardization of mine accounting

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The Accounting Historians Journal Vol. 16, No. 1 June 1989
Glenn Vent
UNIVERSITY OF NEVADA, LAS VEGAS
and.
Ronald A. Milne UNIVERSITY OF NEVADA, LAS VEGAS
THE STANDARDIZATION OF MINE ACCOUNTING
Abstract: This paper presents the history of the international efforts to standardize mine accounting between 1895 and 1915. Extractive industries, such as mining and oil and gas, posed especially difficult problems for the accounting profession. In 1895 there was almost no literature to help in the resolution of these problems. During this following interval the issues of mine accounting were thoroughly discussed and limited standardization was achieved in some re-gions. Near the end of this period the Institution of Mining and Metallurgy unanimously adopted a set of accounting standards for the mining industry.
INTRODUCTION
From 1895 to 1915 there was a vigorous international effort to establish standardized methods of accounting for the mineral industry. The prime objective of this movement was to achieve comparability of financial statements throughout the industry. If greater accounting uniformity could be achieved, it was hoped that the public would have more faith in the financial reports of mining companies and therefore be more willing to invest in such ventures.
At the beginning of this period there was essentially no literature to guide in the design of an accounting system for a mine and as a result there was little, if any, uniformity. The only accounts that were likely to be comparable were cash and current liabilities. During the period from 1895 to 1915 the leaders of the mining industry discussed a wide range of topics, such as accounting for exploration, property acquisition, de-velopment and the related issues of depletion. As is often the case in accounting theory, these pioneers were unable to agree on several important questions. However, they succeeded in defining and clarifying many issues; promulgating a set of mine accounting standards and achieving some regional standardiza-tion within the industry.
Even a cursory review of the accounting literature will show that the mine standardization movement extended from ap-proximately 1895 to 1930. However, the movement can be divided into two distinct phases, which were separated by the